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Section 2 The Central Sales Tax, 1956

The Central Sales Tax, 1956

 

 

2. DEFINITIONS. –

 

In this Act, unless the context otherwise requires,—

 

(a) “appropriate State” means—

 

(i) in relation to a dealer who has one or more places of business situated in the same State, that State;

 

(ii) in relation to a dealer who has 1[***] places of business situated in different States, every such State with respect to the place or places of business situated within its territory;

 

2[***]

 

3[(aa) “business” includes—

 

(i) any trade, commerce or manufacture, or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern; and

 

(ii) any transaction in connection with or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern;

 

(ab) “crossing the customs frontiers of India” means crossing in the limits of the area of a customs station in which imported goods or export goods are ordinarily kept before clearance by customs authorities.

 

Explanation.—For the purposes of this clause, “customs station” and “customs authorities” shall have the same meanings as in the Customs Act, 1962 (52 of 1962);]

 

4[(b) “dealer” means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash or for deferred payment, or for commission remuneration or other valuable consideration, and includes—

 

(i) a local authority, a body corporate, a company, any co-operative society or other society, club, firm, Hindu undivided family or other association of persons which carries on such business;

 

(ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not, who carries on the business of buying, selling, supplying or distributing, goods belonging to any principal whether disclosed or not; and

 

(iii) an auctioneer who carries on the business of selling or auctioning goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal.

 

Explanation 1.—Every person who acts as an agent, in any State, of a dealer residing outside that State and buys, sells, supplies, or distributes, goods in the State or acts on behalf of such dealer as—

 

(i) a mercantile agent as defined in the Sale of Goods Act, 1930
(3 of 1930), or

 

(ii) an agent for handling of goods or documents of title relating to goods, or

 

(iii) an agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment,

 

and every local branch or office in a State of a firm registered outside that State or a company or other body corporate, the principal office or headquarters whereof is outside that State, shall be deemed to be a dealer for the purposes of this Act.

 

Explanation 2.—A Government which, whether or not in the course of business, buys, sells, supplies or distributes, goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall except in relation to any sale, supply or distribution of surplus, un-serviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act;]

 

(c) “declared goods” means goods declared under section 14 to be of special importance in inter-State trade or commerce;

 

(d) “goods” includes all materials, articles, commodities and all other kinds of movable property, but does not include 5[newspapers] actionable claims, stocks, shares and securities.

 

5[(dd) “place of business” includes—

 

(i) in any case where a dealer carries on business through an agent by (whatever name called), the place of business of such agent;

 

(ii) a warehouse, godown or other place where a dealer stores his goods; and

 

(iii) a place where a dealer keeps his books of account;

 

(e) “prescribed” means prescribed by rules made under this Act;

 

(f) “registered dealer” means a dealer who is registered under section 7;

 

6[(g) “sale”, with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or deferred payment or for any other valuable consideration, and includes,—

 

(i) a transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;

 

(ii) a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;

 

(iii) a delivery of goods on hire-purchase or any system of payment by instalments;

 

(iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;

 

(v) a supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;

 

(vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration,

but does not include a mortgage or hypothecation of or a charge or pledge on goods;]

 

(h) “sale price” means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged:

 

7[Provided that in the case of a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, the sale price of such goods shall be determined in the prescribed manner by making such deduction from the total consideration for the works contract as may be prescribed and such price shall be deemed to be the sale price for the purpose of this clause;]

 

8[(i) “sales tax law” means any law for the time being in force in any State or part thereof which provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf and includes value added tax law, and “general sales tax law” means any law for the time being in force in any State or part thereof which provides for the levy of tax on the sale or purchase of goods generally and includes value added tax law;]

 

(j) “turnover” used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period 9[and determined in accordance with the provisions of this Act and the rules made thereunder];

7[(ja) “works contract” means a contract for carrying out any work which includes assembling, construction, building, altering, manufacturing, processing, fabricating, erection, installation, fitting out, improvement, repair or commissioning of any movable or immovable property;]

 

(k) “year”, in relation to a dealer, means the year applicable in relation to him under the general sales tax law of the appropriate State, and where there is no such year applicable, the financial year.

 

COMMENTS

 

Electricity to be goods

 

Electricity must be considered to be goods for the purpose of sales tax legislation; Commissioner of Sales Tax v. Kolhapur Electric Supply Co., (1976) 37 STC 587.

 

Lottery tickets are goods

 

Lottery tickets comprising the right to participate in the draw are goods; M. Anraj v. Government of Tamil Nadu, (1986) 61 STC 165 (SC).

 

Sale price

 

The definition of ‘sale price’ is in two parts. The first part says that ‘sale price’ means the amount payable to a dealer as consideration for the sale of any goods. The second part which is an inclusive clause, includes any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in case where such cost is separately charged. Where the cost of freight is part of the price, it would fall within the first part of the definition and to such a case, the exclusion clause in the second part has no application. So it is exigible tax; Hindustan Sugar Mills Ltd. v. State of Rajasthan, (1979) 43 STC 13 (SC).

 

—————

1. The words “one or more” omitted by Act 31 of 1958, sec. 2 (w.e.f. 1-10-1958).

2. Explanation omitted by Act 31 of 1958, sec. 2 (w.e.f. 1-10-1958).

 

3. Ins. by Act 103 of 1976, sec. 2 (w.e.f. 7-9-1976).

 

4. Subs, by Act 103 of 1976, sec. 2, for clause (b) (w.e.f. 7-9-1976).

 

5. Ins. by Act 31 of 1958, sec. 2 (w.e.f. 1-10-1958).

 

6. Subs. by Act 20 of 2002, sec. 150, for clause (g) (w.e.f. 11-5-2002).

 

7. Ins. by Act 18 of 2005, sec. 89 (w.e.f. 13-5-2005).

 

8. Subs.by Act 18 of 2005, sec. 89, for clause (i) (w.e.f. 13-5-2005). Clause (i), before substitution, stood as under:

 

‘(i) “sales tax law” means any law for the time being in force in any State or part thereof which provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf, and “general sales tax law” means the law for the time being in force in any State or part thereof which provides for the levy of tax on the sale or purchase of goods generally;’.

 

9. Subs. by Act 28 of 1969, sec. 2, for “and determined in the prescribed manner” (w.r.e.f. 5-1-1957).

 

 

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Central Sales Tax, 1956

 

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